Instead of reducing Social Security by privatization or by other means, some economists recommend doubling the payments to retirees. As a recent retiree, I would benefit, but I think that it is a good idea for older retirees most of all.
Ours is a consumer society and the economy is two-thirds driven by consumers. When I retired on Social Security and two small pensions, one mine and one belonging to my wife, I exited from the consumer society. I can no longer afford to purchase the goods and services that are constantly advertised in the media. My income is adequate, barely so, for food and shelter and other essentials at this time. As time passes, I expect that the cost of living increases in Social Security will not keep up with inflation, and my standard of living will fall farther. This is what has happened to people who retired before I did.
Doubling Social Security payments would be a better way to stimulate the economy than tax cuts for the wealthy. The retired are much more likely to spend their increased Social Security payments because they must. The wealthy are much more likely to save their tax reductions, perhaps abroad, rather than spending those dollars to stimulate the economy here in the US.
If you are preparing your tax returns in this tax season, please take a moment and look at your W-2. In box 4, you will find how much you paid in Social Security tax during 2010 and below that in box 6 you will find the amount you paid in Medicare tax. Then multiply those numbers by the number of years you have worked for a very rough estimate of how much you have contributed to Social Security and Medicare. If you are young, the amount will not be much. If you are older, the amount may surprise you. Both taxes are regressive, lower and middle income earners pay a larger percentage of their income in those taxes than the wealthy do.
Having paid so much to date, are you willing that those benefits, those entitlements, should be taken away from you when you may need them. Before Social Security, our elderly lived and died in poverty if their relatives could not support them. Are you willing to be dependent on your children or grandchildren? That is the direction the budget cutters in Washington want to go. I say NO.
Please see Quality